U.S. Rig Count Holds Steady at 1864 - Analyst Blog

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In its weekly release, Houston-based oilfield services company Baker Hughes Inc. ( BHI ) reported an unchanged U.S. rig count (number of rigs searching for oil and gas in the country), as an increase in the number of oil rigs was offset by a fall in the gas rig count.

The Baker Hughes rig count, issued since 1944, acts as an important yardstick for drilling contractors such as Transocean Inc. ( RIG ), Diamond Offshore ( DO ), Noble Corp. ( NE ), Nabors Industries ( NBR ), Patterson-UTI Energy ( PTEN ), Helmerich & Payne ( HP ), etc. in gauging the overall business environment of the oil and gas industry.

Analysis of the Data

Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,864 for the week ended September 14, 2012, same as the previous week's count.

The current nationwide rig count is more than double than that of the 6-year low of 876 (in the week ended June 12, 2009) though it is below the prior-year level of 1,985. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.

Rigs engaged in land operations, inland waters activity and offshore drilling - all remained steady at their week-earlier levels of 1,794, 19 and 51, respectively.

Natural Gas Rig Count: The natural gas rig count decreased for the eighteenth time in 21 weeks to 448 (a drop of 4 rigs from the previous week). As per the most recent report, the number of gas-directed rigs is at their lowest level since June 11, 1999 and is down 52% from its 2011 peak of 936, reached during mid-October.

The current natural gas rig count remains 72% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 912 active natural gas rigs.

Oil Rig Count: The oil rig count - which was at a 25-year high of 1,432 in August - was up by 4 to 1,413. The current tally is way above the previous year's rig count of 1,062. It has recovered strongly from a low of 179 in June 2009, rising by almost 8 times.

Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 3 remained unchanged from the previous week.

Rig Count by Type: The number of vertical drilling rigs rose by 9 to 524, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was down by 9 at 1,340. In particular, horizontal rig units - that reached an all-time high of 1,193 in May this year - decreased by 2 from the last week's level to 1,133.


 
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HELMERICH&PAYNE (HP): Free Stock Analysis Report
 
NABORS IND (NBR): Free Stock Analysis Report
 
NOBLE CORP (NE): Free Stock Analysis Report
 
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TRANSOCEAN LTD (RIG): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: BHI , DO , HP , NBR , NE

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